In the assessment year 2024-25, around 7.28 crores of Income Tax Returns were filed with the authority. Accurately filing the returns is necessary to gauge the adequate tax liability. However, in case of any discrepancy with the income tax return filed, the tax authority might send an income tax notice.
Avoiding unnecessary panic on receipt of such notice is essential. Maintaining composure and resolving the issue highlighted by the notice requires a thorough understanding of the different types of income tax notices. Therefore, this blog takes a keen look at the concept of income tax notices and explores how to resolve the issues highlighted in them.
Introduction to the income tax notice
A formal notice sent to a taxpayer by the income tax department, outlining particular discrepancies related to an ITR, is known as an income tax notice. The notice might deal with audits, demands for tax payments, refund letters, requests for further information, or explanations of discrepancies in a tax return, among other aspects of income tax filing and compliance.
Different types of notifications are covered by different provisions of the Income Tax Act. Each notice targets a specific discrepancy. Understanding these notices is essential for resolving the issue in question.
Section 133(6) of Income Tax Act
Section 133(6) of Income Tax Act gives particular income tax department officials the authority to ask any taxpayer to provide information and supporting documentation for tax-related investigations and procedures. There are several reasons why the notification may be given.
Taxpayers who claim a lesser income or conceal revenue sources may receive such letters. Inaccurately declaring deductions and exemptions from income taxes may also result in it. Other reasons for notices under Section 133(6) of Income Tax Act include inadequate or erroneous tax returns, failure to submit an ITR, and much more.
The key aspect of Section 133(6) of Income Tax Act is the issuer of the notice. The officials who can issue the notice are discussed below.
- Assessing Officer (AO)
- Joint Commissioner
- Joint Commissioner (Appeals)
- Deputy Commissioner (Appeals)
- Director General or Chief Commissioner
Also read: Unlocking tax benefits: Your guide to Section 80GG deductions
Income Tax Act Section 148
A range of provisions of the Income Tax Act work in tandem with Section 148 to address the issues in question. A notice sent under the Income Tax Act Section 148 has to pass through a range of other Sections and scrutiny. The steps below can help explain the process of sending a notice under the Income Tax Act Section 148.
- Section 147 of the Income Tax Act states that the Assessing Officer (AO) can use provisions listed from Sections 148 to 153 to send income tax notices for reassessment in case any income has escaped due assessment.
- Provisions of Section 148A apply before the provisions of Section 148. It provides a show cause notice to the assessee and allows him to explain to the Income Tax Department why a notice under Income Tax Act Section 148 should not be issued against him.
- A show cause notice under Section 148A must be sent, along with optimum documentary evidence verifying the fact that a stipulated income has skipped assessment. In case of a lack of particular documentary evidence, the notice cannot be sent under this Section.
- The notice will stipulate the period within which it must be answered. Nevertheless, it must not be more than three months from the conclusion of the month in which the notification is issued. For instance, if a notice is issued on 3rd May 2025, the reply must be sent by 31st August 2025.
- Finally, if the cause stated by the assessee does not satisfy the Income Tax Department, a notice under Income Tax Act Section 148 is issued. If the issuer is dissatisfied with the information and evaluation given and believes that any earnings have not been properly evaluated, they can send a Section 148 Notice to reassess an income tax return (ITR).
- On receipt of a notice under the Income Tax Act Section 148, the taxpayer has to update its ITR and present all required information according to the provisions of Section 139, which stipulates the procedure of filing an ITR.
Notice for income tax outstanding demand
Section 156 of the Income Tax Act deals with the notice for outstanding demand. The notice for income tax outstanding demand is given by the AO if any tax, interest, penalty, fine or any other amount remains unpaid. The notice demands the payment of such an outstanding amount.
A taxpayer can follow the steps discussed below to resolve an income tax outstanding demand.
Step 1: Use the official income tax portal through ‘incometax.gov.in’ and access the e-filing portal.
Step 2: Access the ‘Pending Actions’ menu and select ‘Response to Outstanding Demand’ to view all outstanding demands.
Step 3: Click ‘Submit Response’.
Step 4: The taxpayer can pay their due through ‘Pay Now’. In case the assessee does not agree with the claim, he can choose the option ‘Disagree with demand (Either in Full or Part)’
Also read: Form 10-IE: Choosing New Tax Regime under Income Tax Act
Other types of Income Tax Notice
The table below explains some of the other income tax notices discussed in the Income Tax Act.
| Section | Detail |
| 143(1) | It is an income tax notice after the ITR is processed. It seeks a response to incorrect and inconsistent claims. For example, arithmetic errors. |
| 142(1) | It is issued either to demand additional documents and information for the ITR already filed or to remind an assessee to file an ITR. |
| 148 | It is issued if income is undervalued or tax is underpaid. |
Income Tax Notice: Check Online
Income tax notices can be sent to all kinds of taxpayers. An income tax notice to salaried employees or any other category of taxpayer can be authenticated online following a few simple steps.
Step 1: Visit the income tax portal and select the option Authenticate notice/order issued by ITD present under Quick Links.
Step 2: The income tax notice can be authenticated in two ways.
- If the option PAN, Document Type, Date of Issue and Mobile Number is selected.
- PAN, assessment year, mobile number and other details must be entered. Then select the Continue option.
- A six-digit OTP will be issued to the provided cellphone number. Verify the OTP.
- Finally, the taxpayer can note his pending notices. If no notices are available, the screen will state that no record is found for the given criteria.
- If the option Document Identification Number and Mobile Number is selected.
- Enter the document identification number and the mobile number.
- Once Continue is clicked, A six-digit OTP will be issued to the provided cellphone number.
- If a notice is issued, the screen will show it. In case there are no notices issued, the screen will say the same.
Also read: How to do tax planning for high-income earners?
Resolving an Income Tax Notice
When a taxpayer receives an income tax notification, they should avoid worrying and instead follow the actions outlined below.
Step 1: Read the notice carefully and note the issue stated, along with the deadline within which it has to be resolved.
Step 2: Verify and authenticate the notice online using the steps discussed.
Step 3: Consult a tax expert in case the taxpayer feels a lack of awareness regarding the matter.
Step 4: It is important to resolve the issue honestly without any dubious means to avoid penalty and criminal charges.
Bottomline
The Income Tax Department uses an income tax notice to warn taxpayers of any discrepancies or missing information on their Income Tax Return (ITR). On receipt of a notice, it is necessary to read it carefully and note the important details. Understanding the Section under which the notice is sent is key to resolving the issue efficiently.
Various Sections of the Income Tax Act explain the different kinds of income tax notices that can be sent. However, before taking any action, taxpayers must check the legitimacy of the notification. Abiding by the prevalent laws and avoiding dubious means is necessary for resolving an income tax notice effectively. The notice must be answered within the due date stipulated to protect against any future complications.
FAQs
If an income tax notice arrives, it is important not to panic. An income tax notice is sent for myriad reasons and does not in itself prove any culpability. The taxpayer must read the notice carefully and try to understand the issue highlighted. It is important to address the notice before the expiry of the maturity period. The taxpayer must also authenticate the notice using the income tax department portal. Moreover, in case the assessee feels underconfident in resolving the issue, an expert can be consulted.
While filing an income tax notice, it is crucial to adhere to the prevailing rules and regulations to avoid income tax notices in the future. Understanding the essence of the prevailing Income Tax Act provisions is the key to filing an ITR optimally. Moreover, in case an income tax notice arrives, the taxpayer must not panic, and after reading the details carefully, they can take the steps necessary to resolve these discrepancies.
The income tax notice might be sent through the post or email. The taxpayer can authenticate and verify the income tax notice sent through the income tax portal. Under the quick links, the taxpayer must choose ‘Authenticate notice/order’ issued by ITD. Once this option is chosen, the taxpayer has two ways to proceed further. He can either use his PAN and other details or the income tax notice number to proceed. An OTP is then sent to the mobile number entered. Once the OTP is validated, the taxpayer can see their unresolved notices, if any.
Yes, a notice can be issued for a current account transaction if the details of the transaction in question are found suspicious. In case the transaction information is delivered optimally, notices won’t be issued. However, if the nature or source of the transaction seems suspicious to the authorities, they can issue a notice asking for more information along with necessary documentary evidence. It is crucial to stay calm and comply efficiently to resolve the issue.
A notification can be issued to a taxpayer who has filed their ITR under the Income Tax Act Section 143(1). In essence, Section 143(1) of the Income Tax Act, 1961, is an automatic computer-generated notice that notifies the taxpayer of any errors in their tax return. Additionally, it informs the taxpayer of any interest that is due. Issues like arithmetic errors are usually highlighted through this notice. The objective is to get rid of basic issues through a preliminary check.
